This week Purdue University and the CME Group released the June ag barometer. While the barometer did show improvement in both current conditions and future expectations, it also confirmed an issue USDA was trying to avoid. The 2019 version of the market facilitation program (MFP) did influence planting decisions.
The June survey of more than 400 farmers was completed after USDA-RMA’s final planting dates for corn throughout the Corn Belt. Since the announcement of the program, USDA officials have said that payments would only be made on planted acres. The June survey found the program complicated the decision making for farmers considering to file a prevented planting claim. And what’s more, it swayed planted acres. Something the USDA was trying desperately to keep from happening.
“USDA’s announcement of a 2019 MFP program indicated that payments would be based on planted acres of a large number of covered crops, including corn and soybeans. In light of that announcement and the historic corn and soybean planting delays this spring, we asked producers who planted corn or soybeans in 2018 whether or not the MFP announcement affected their decision on whether or not to take a prevented planting payment this year,” James Mintert explains. “Ten percent of corn and soybean producers said it did impact their prevented planting decision making and one out of five farmers within that group said they intended to plant more corn, while one out of ten farmers within that group said they intended to plant more soybeans, because of the MFP program announcement.”
The survey also found that 2019 will likely boast a record number of prevented planting acres.
“On the June survey we asked growers who planted corn or soybeans in 2018 if they intended to take a Federal Crop Insurance prevented planting payment on any of their 2019 intended corn acres,” he says. “Nearly one-third (32%) of farmers in our survey said they intended to take prevented planting payments on some of their corn acres.”
Of the producers who intended to take prevented planting payments, 51% said they will do so on more than 15% of their intended acreage.